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Exhibit 10.16
EMPLOYMENT AGREEMENT
THIS
EMPLOYMENT AGREEMENT (this "Agreement") is made and entered into as
of
the 21st day of April, 2003, by and between American Prepaid
Professional
Services, Inc. (the "Company"), a Florida corporation (the
"Company") and George
W. Dunaway (the "Executive").
WHEREAS, the Company provides dental and vision health care
benefits and
activities related thereto, including network-based dental and
vision care,
reduced fee-for-service, third party administration, PPO dental and
vision
plans, and indemnity dental and vision plans (the "Business");
and
WHEREAS, the Company desires to employ Executive in the capacity
and on the
terms and conditions hereinafter set forth and Executive is willing
to serve in
such capacity and on such terms and conditions.
NOW,
THEREFORE, in consideration of the mutual covenants, promises
and
conditions set forth in this Agreement, and for other good and
valuable
consideration, the parties hereto hereby agree as follows:
1. EMPLOYMENT. The Company hereby employs the Executive in the
position of Chief Financial Officer of the Company, and the
Executive hereby
accept such employment upon the terms and conditions set forth in
this
Agreement. For purposes of this Agreement, "employment" shall mean
any period of
time during the term hereof which the Company is paying the
Executive salary or
wages.
2. DUTIES OF THE EXECUTIVE. The Executive agrees to perform and
discharge the duties which may be assigned to the Executive from
time to time by
the Company's Board of Directors or its designees and consistent
with the
Executive's general area of experience, knowledge and skill. The
Executive also
agrees to materially comply with all of the Company's material
policies,
standards and regulations and to follow the reasonable instructions
and
directives of the Executive's superiors within the Company, as
promulgated by
the Board of Directors of the Company. The Executive will devote
his full
professional and business related time, skills and commercially
reasonable
efforts to the Business and the Executive will not, during the term
of this
Agreement, be engaged (whether or not during normal business hours)
in any other
business or professional activity (excluding reasonable and
appropriate
charitable activities), whether or not such activity is pursued for
gain, profit
or other pecuniary advantage without the prior written consent of
the Board of
Directors of the Company, which consent will not be unreasonably
withheld.
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3. COMPENSATION AND BENEFITS.
(a) Annual Salary. During the term of employment, American
Prepaid
shall pay the Executive a salary (the "Base Salary") at an annual
rate as shall
be determined from time to time by the Chief Executive Officer of
American
Prepaid, provided, however, that such rate per annum shall not be
less than
$240,000. Such salary shall be subject to withholding under
applicable law and
shall be payable in periodic installments in accordance with
American Prepaid's
usual practice for its executives, as in effect from time to
time.
(b) Annual Bonus Payment. Upon completion of each fiscal year and
as
determined by the Compensation Committee of the Board of Directors
of the
Company, the Executive shall be eligible to receive a bonus
("Annual Bonus") in
accordance with any bonus plan then in effect for executives of the
Company of
equivalent position and title, provided the Executive is employed
by the Company
at the time said Annual Bonus, if any, is paid in the normal course
(typically
2nd Quarter). Notwithstanding the above, it is agreed that
Executive is
guaranteed a first year (2003) bonus equal to 20% of Executive's
Base Salary
paid during 2003 ("Guaranteed Bonus"). Said Guaranteed Bonus shall
be due and
payable in the 2nd Quarter of 2004.
(c) Other Benefits. The Executive will be entitled to such
fringe
benefits as may be provided from time-to-time by the Company to its
Executives,
including, but not limited to, group health insurance, disability,
dental,
vision, retirement and any other fringe benefits now or hereafter
provided by
the Company to its Executives, if and when the Executive meets the
eligibility
requirements for any such benefit. The Company reserves the right
to change or
discontinue any Executive benefit plans or program now being
offered to its
Executives; provided, however, that all benefits provided for
executive officers
of the Company will be provided to the Executive on an equal basis
and the
aggregate of such benefits shall not be less than those currently
in effect or
otherwise be materially less favorable to the Executive.
(d) Option Grant.
(i) CompBenefits Corporation ("CompBenefits") agrees to grant
to
the
Executive a non-qualified ("time vested") stock option to
purchase
125,000 shares of CompBenefits' common stock pursuant to a time
vested
stock option agreement in the form attached hereto as Exhibit "A".
The
purchase option shall have a price per share equal to 100% of the
fair
market value per share of CompBenefit's common stock (as determined
by the
Board of Directors of CompBenefits Corporation) on the date on
which such
time
vested options are granted; and
(ii) Grant to the Executive a non-qualified ("performance based
vesting") stock option to purchase 20,000 shares of CompBenefits'
common
stock pursuant to a performance based vesting stock option
agreement in the
form
attached
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hereto as Exhibit "B." The performance vesting benchmarks will
be
established by the Board of Directors and once established said
performance
vesting benchmarks shall become a part of, by exhibit, the
performance
based vesting stock option agreement. The purchase option shall
have a
price per share equal to 100% of the fair market value per share
of
CompBenefits' common stock (as determined by the Board of Directors
of
CompBenefits) on the date on which such performance based options
are
granted.
(e) Business Expenses. The Executive will be reimbursed for all
reasonable expenses incurred in the discharge of the Executive's
duties under
this Agreement pursuant to the Company's standard reimbursement
policies.
(f) Vacation. The Executive shall receive paid vacation annually
in
accordance with the Company's practices for executive officers of
the Company.
(g) Withholding. The Company will deduct and withhold from the
payments made to the Executive under this Agreement, state and
federal income
taxes, FICA and other amounts normally withheld from compensation
due
Executives.
4. TERM AND TERMINATION. The Executive's employment with the
Company
will be for a period commencing on the date hereof and expiring on
the first to
occur of (i) termination by the Company (with or without Cause) and
(ii) the
Executive's resignation (with or without Good Reason).
(a) Definition of Cause. For purposes of this Agreement, "Cause"
shall
mean the occurrence of any of the following:
(i) The Executive (A) materially breaches any of the terms or
conditions set forth in Sections 5, 6, or 7 of this Agreement or
(B)
materially breaches any of the other terms and conditions set forth
in this
Agreement including, without limitation, the failure to use
commercially
reasonable efforts in the performance of duties assigned to the
Executive
on a
full time basis, and, in the case of either clause (A) or clause
(B),
fails to cure such breach within twenty (20) days after the
Executive's
receipt from the Company of written notice of such breach, which
notice
shall describe in reasonable detail the basis for the Company's
belief that
the
Executive is in breach hereof;
(ii) the Executive commits any act in bad faith materially
detrimental to the business or reputation of the Company;
(iii) the Executive is convicted of (or admits in writing to
the
commission of) any crime involving fraud, deceit or moral
turpitude;
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(iv) the Executive intentionally engages in unethical,
dishonest,
or
illegal activities that have an adverse effect upon the business
or
reputation of the Company; or
(v) the Executive dies or becomes mentally or physically
incapacitated or disabled so as to be unable to perform the
Executive's
duties under this Agreement. For purposes of this Agreement, the
Executive
shall be deemed to be mentally or physically incapacitated or
disabled so
as
to be unable to perform his duties if and to the extent he
becomes
permanently disabled under the Company's long-term disability
policy then
in
effect.
(b) Definition of Good Reason. For purposes of this Agreement,
"Good
Reason" shall mean the occurrence of any of the following:
(i) the Company materially breaches any of the terms or
conditions set forth in this Agreement and fails to cure its breach
within
twenty (20) days after its receipt from the Executive of written
notice of
such
breach, which notice describes in reasonable detail the
Executive's
belief that the Company is in breach hereof;
(ii) the Company materially diminishes the Executive's duties
or
reassigns the Executive to a position not consistent with the
Executive's
general area of knowledge, experience and skills, or assigns
substantial
additional responsibilities to the Executive;
(iii) the Company reduces the Executive's Base Salary;
(iv) the Company relocates the Executive's principle place of
employment to more than 35 miles from the Executive's then
current
principal place of employment;
(v) the Company transfers substantially all of its assets to a
successor entity and such entity fails to assume the Company's
obligations
under this Agreement.
For purposes of this Agreement, "termination of employment,"
"termination of the
Executive" and "termination of this Agreement" shall have the same
meaning
unless otherwise agreed to in writing by the parties hereto.
(c) Severance Payments. In the event of termination of the
Executive
by the Company without Cause or resignation by the Executive with
Good Reason:
(i) the Executive shall be entitled to receive severance
payments
equal to his Base Salary until the first anniversary of the date of
such
termination which
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amounts will be payable at the same times as the Base Sal
